Agencies Carrying Over More Money at the End of the Fiscal Year

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At a time when agencies are under attack for “use it or lose it” spending at the end of the fiscal year, the Government Accountability Office reported that the number of accounts with carryover balances rose from fiscal 2007 to fiscal 2012, and that efforts to maximize efficiency in use of the funds must be tailored to individual programs.

In reviewing eight accounts from 2007 through 2012 in the Defense, Health and Human Services, Housing and Urban Development, and Treasury departments, auditors estimated total carry over balances for fiscal 2012 of $2.2 trillion, of which about $800 billion had not yet been obligated.

GAO noted that a single account may support multiple programs and said “a case-by-case analysis is needed to understand how best to achieve… financial benefits.” Each account or program with unexpended funds, it said, should be examined by asking questions about its mission and goals, the sources and fiscal characteristics of the funding, the factors that affect the size or composition of carryover balances, and how the agency measures the balances.

“If an agency does not have a robust strategy in place to manage carryover balances, or is unable to adequately explain or support the reported carryover balance, then a more in-depth review is warranted,” GAO wrote. “In those cases, balances may either fall too low to efficiently manage operations or raise to unnecessarily high levels, producing potential opportunities for those funds to be used more efficiently elsewhere.”

The report, released on the last day of the fiscal year, was requested by House Budget Committee Chairman Paul Ryan, R-Wis.

GAO made no recommendations, and the four departments generally agreed with the observations, with HHS cautioning that “conclusions drawn from the report may not apply across the board to all accounts.”

(Image via Givaga/Shutterstock.com)

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